Final answer:
The Internet offers dynamic pricing, which allows for real-time adjustments based on demand. This is different from traditional pricing methods and is facilitated by the reduced menu costs associated with digital services.
Step-by-step explanation:
The Internet offers a pricing strategy known as dynamic pricing, where the price can easily be adjusted in response to changes in demand. Unlike traditional pricing methods, dynamic pricing allows for real-time price changes to optimize sales and profits based on current market conditions.
On-demand streaming services, such as Netflix, are known to use tiered pricing models, which are adapted based on subscription levels and possibly other factors such as viewing habits, though this is not necessarily dynamic pricing. As cited by modern economists, menu costs are a concern for firms; however, the digital nature of online services reduces these costs, allowing for more frequent price changes in response to supply and demand.